Tugas PM Week 8 Ask Chuck

Ask Chuck
The Charles Schwab Corporation (Charles Schwab) is a San Francisco-based financial services company.45
Like many companies in that industry, Charles Schwab struggled during the economic recession.
Founded in 1971 by its namesake as a discount brokerage, the company has now “grown up” into a full-
service traditional brokerage firm, with more than 300 offices in some 45 states and in London and Hong
Kong. It still offers discount brokerage services, but also financial research, advice, and planning; retirement
plans; investment
management; and proprietary financial products including mutual funds, mortgages, CDs, and other banking
products through its Charles Schwab Bank unit. However, its primary business is still making stock trades
for investors who make their own financial decisions. The company has a reputation for being conservative,
which helped it avoid the financial meltdown suffered by other investment firms.
Founder Charles R. Schwab has a black bowling ball perched on his desk. It’s a reminder of another long-
ago stock market bubble, when “shares of bowling-pin companies, shoemakers, chalk manufacturers, and
lane operators were thought to be” sure bets because of the “limitless potential of suburbia.” And guess
what, they weren’t. He keeps the ball as a reminder not to listen to the “hype or take excessive risks.”
Like many companies, Charles Schwab is fanatical about customer service. By empowering front-line
employees to respond fast to customer issues and concerns, Cheryl Pasquale, a manager at one of Schwab’s
branches, is on the front line of Schwab’s efforts to prosper in a struggling economy. Every workday
morning, she pulls up a customer feedback report for her branch generated by a brief survey the investment
firm e-mails out daily. The report allows her to review how well her six financial consultants handled the
previous day’s transactions. She’s able to see comments of customers who gave both high and low marks
and whether a particular transaction garnered praise or complaint. On one particular day, she notices that
several customers commented on how difficult it was to use the branch’s in-house information kiosks.
Wanting to know more, she decides to “ask her team for insights about this in their weekly meeting.” One
thing that she pays particular attention to is a “manager alert—a special notice triggered by a client who has
given Schwab a poor rating for a delay in posting a transaction to his account.” And she’s not alone.
Every day, Pasquale and the managers at all the company’s branches receive this type of customer feedback.
It’s been particularly important to have this information in the economic climate of the last few years.
Discussion Questions
1. Describe and evaluate what Charles Schwab is doing.

2. How might the company’s culture of not buying into hype and not taking excessive risks affect its
organizational structural design?
3. What structural implications—good and bad—might Schwab’s intense focus on customer feedback
have?
4. Do you think this arrangement would work for other types of organizations? Why or why not?
A New Kind of Structure
Admit it. Sometimes the projects you’re working on (school, work, or both) can get pretty boring and
monotonous. Wouldn’t it be great to have a magic button you could push to get someone else to do that
boring, time-consuming stuff ? At Pfizer, that “magic button” is a reality for a large number of
employees.46
As a global pharmaceutical company, Pfizer is continually looking for ways to help employees be more
efficient and effective. The company’s senior director of organizational effectiveness found that the
highly educated MBAs it hired to “develop strategies and innovate were instead Goggling and making
Power Points” (A. Cohen,” Scuttling Work,” Fast Company, February 1, 2008, pp. 42–43). Indeed,
internal
studies conducted to find out just how much time its valuable talent was spending on menial tasks was
startling. The average Pfizer employee was spending 20 percent to 40 percent of his or her time on
support work (creating documents, typing notes, doing research, manipulating data, scheduling
meetings) and only 60 percent to 80 percent on knowledge work (strategy, innovation, networking,
collaborating, critical thinking).
And the problem wasn’t just at lower levels. Even the highest-level employees were affected. Take, for
instance, David Cain, an executive director for global engineering. He enjoys his job—assessing
environmental real estate risks, managing facilities, and controlling a multimillion-dollar budget. But he
didn’t so much enjoy having to go through spreadsheets and put together Power Points. Now, however,
with Pfizer’s “magic button,” those tasks are passed off to individuals outside the organization.
Just what is this “magic button”? Originally called the Office of the Future (OOF), the renamed Pfizer
Works allows employees to shift tedious and time consuming tasks with the click of a single button on
their computer desktop. They describe what they need on an online form, which is then sent to one of
two Indian service-outsourcing firms. When a request is received, a team member in India calls the
Pfizer employee to clarify what’s needed and by when. The team member then e-mails back a cost
specification for the requested work. If the Pfizer employee decides to proceed, the costs involved are
charged to the employee’s department.
About this unique arrangement, Cain said that he relishes working with what he prefers to call his
“personal consulting organization.”
The number 66,500 illustrates just how beneficial Pfizer Works has been for the company. That’s the
number of work hours estimated to have been saved by employees who’ve used Pfizer Works. What
about David Cain’s experiences? When he gave the Indian team a complex project researching strategic
actions that worked when consolidating company facilities, the team put the report together in a month,
something that would have taken him six months to do alone. “Pfizer pays me not to work tactically, but
to work strategically,” he says (J. McGregor, “Outsourcing Tasks Instead of Jobs,” Bloomberg
BusinessWeek, March 11, 2009).
Discussion Questions
1. Describe and evaluate what Pfizer is doing with its Pfizer Works.
2. What structural implications—good and bad—does this approach have?
(Think in terms of the six organizational design elements.)
3. Do you think this arrangement would work for other types of organizations?
4. Why or why not? What types of organizations might it also work for?
5. What role do you think organizational structure plays in an organization’s
efficiency and effectiveness? Explain.

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1. Describe and evaluate what Charles Schwab is doing.

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